This month, British Petroleum took a big step toward resolving some of its largest remaining liabilities: claims by federal, state, and local governments.
On July 2, 2015, BP agreed to pay $18.7 billion to settle all federal and state environmental claims arising from the Deepwater Horizon or “Macondo” offshore disaster.
If approved by Louisiana federal district Judge Carl Barbier, it will be the largest environmental settlement in history.
The largest portion of the new BP settlement covers $7.3 billion in natural resources claims. It will be used to remediate damage, fund gulf restoration projects, and assist with adaptive management needs. The agreed-upon amount is larger than many legal experts anticipated.
The settlement also includes $5.5 billion in fines under the Clean Water Act. Many experts view this portion of the settlement as a bargain for BP, as the oil giant faced a potential CWA liability of $13.7 billion if the case had been fully litigated.
The remaining allocation of settlement funds includes $4.9 billion in state economic claims, and $1 billion in local government claims. This is intended, among other things, to compensate governments for tax revenue lost as a result of the disaster. The five states involved in the settlement are Alabama, Florida, Louisiana, Mississippi, and Texas.
Here is a breakdown of the new settlement:
This is not the first Deepwater Horizon settlement.
In 2012, BP entered into a settlement with Gulf Coast residents and businesses. BP anticipates that at the end of the day, this settlement could total more than $10.3 billion. It includes more than 100,000 claims filed by individuals and businesses affected by the spill.
BP has also entered into confidential settlements of more than 40 maritime personal injury and Jones Act claims brought by offshore injury attorneys representing workers for BP, Transocean, and Halliburton.
BP also entered into a $4 billion settlement of criminal charges arising from the disaster.
Supreme Court Ruling Paved The Way For Settlement
The latest settlement became all-but-inevitable when the U.S. Supreme Court refused to hear a BP and Anadarko appeal of Judge Barbier’s ruling that, depending on various factors, as much as $13.7 billion in environmental fines could be levied.
Prior Liability Ruling
In September 2014, Judge Barbier issued a detailed order in which he found that BP acted recklessly in failing to take proper steps to prevent the tragedy.
The Deepwater Horizon or “Macondo” explosion killed 11 offshore workers and caused millions of barrels of oil to spill into the Gulf.
Breakdown By State
The amount each state will receive under the new BP offshore settlement is as follows:
What This Means For Texas
Texas will receive $788 million from the settlement.
Texas Governor Greg Abbott said in an official statement that this will allow the state to “reinvest in the Gulf community and reinvigorate the economic and environmental health of the region.”
What This Means For Louisiana
The State of Louisiana is expected to receive more than $6.8 billion from the new offshore settlement: $5 billion for natural resource damages, $1 billion for economic damage, and up to $787 million in Clean Water Act penalties.
According to Representative Garet Graves of the 6th District of Louisiana, covering Baton Rouge and Houma, the settlement will provide Louisiana with $500 million/year for coastal restoration over the next 15 years.
Morrow & Sheppard — Houston Offshore Injury Lawyers Who Assist Injured Workers
The Houston Jones Act lawyers at Morrow & Sheppard are privileged to represent offshore workers and Jones Act seamen who are injured while working for drilling contractors, oil companies, and oilfield service providers.
We are based in Houston, but we handle maritime and offshore cases for victims throughout the Gulf Coast.
Please contact us now for a free and confidential consultation to discuss your claims.